I ll come back to the car analogy, but let me focus on the patches idea for now. In their view, the

Ծ ޥ ꥹ ȥ ݥ륤 Ρ פΥǥ ˤ ޤȤ Ҳ ȤǤ ȥ ǥ Ƥ Ǥ Nick Rowe ݥ륤 ? Ҳ Ƥ ꡢ ȥ Υ ȥ ϡ Simon Wren -Lewis and Nick Rowe Annoy Each Other ʥ ݥ륤 Nick Rowe Ϥ ߤ Ƥ ˡפ ꤵ Ƥ *1
"The aat neomonetarist movement aat starts from an acknowledgement of reality: shortfalls of aggregate demand do happen, and they do matter, and we need an answer . Like the original aat monetarists, however, they reject any government role in the form of discretionary fiscal policy. Instead, they argue that the Fed and its counterparts can do the job all on their own if they really want to."
What I call a "neofiscalist" is exactly the same as what Paul calls a "neomonetarist", except at the Zero Lower Bound. aat When the central bank hits the ZLB, neofiscalists throw up their hands in despair, and call for fiscal policy to manage aggregate demand.
ޥ ꥹ α ư ϡ פ ϳΤ ȯ ΤǤ ꡢ Ǥ ꡢ 桹 б ɬ פȤ Ƥ 롢 Ȥ ǧ ü ȯ Ƥ 롣 ʤ 顢 ޥ ꥹ Ʊ Ϻ Ū ʺ Ȥ Ǥ ꤷ Ƥ 롣 ϡ FRB ƹ 䤬 ε ˤʤꤵ д Ϥ Ǥ ԤǤ 롢 ȼ ĥ Ƥ 롣
Neomonetarism is a radical position. aat We want to get to the root of the problem of insufficient aggregate demand. We see aggregate demand as a monetary phenomenon, that only makes sense conceptually aat in a monetary exchange economy. And we see insufficient aggregate demand (just like an inflationary surfeit of aggregate demand) as due to an underlying failure of monetary institutions. We don't like fiscal patches that cover up that underlying problem. Because fiscal policy has other objectives and you can't always kill two birds with the same fiscal stone. Because we can't always rely on fiscal policymakers being able and willing to do the right thing. And because if your car has alternator trouble you fix the alternator; you don't just keep on doing bodge-jobs like replacing the battery every 100kms. And because if monetary policymakers do want to target too low a level of aggregate demand, then fiscal policy won't work, because the monetary policymakers will simply offset it .
ޥ ꥺ Ū Ω 롣 桹 ˤĤ κ 줿 桹 פ ͻ Ū ȹ Ƥ ꡢ ʾ к ˤ ƤΤ ǰ Ȥ ư ʤ ȹ Ƥ 롣 Ʋ桹 ϡ ϡ ե Ū פβ Ʊ ˡ ͻ μ Ԥ Ū ȹ Ƥ 롣 κ Ū θ ɤ ѥå Ȥ Ϥʤ ˤ Ӥ ꡢƱ ФǾ Ļ Ȥʤ Ȥϸ ʤ ˡ ɼԤ Ȥ ԤǤ ġ Ǥ ƤˤϤǤ ʤ ޤ ư ǥ 륿 饪 륿 ΤǤ ꡢ Хåƥ 100 ? Ȥ Ȥ ä ο к 뤳 ȤϤ ʤ ? ˡ ͻ ɼԤ ޤ ˤ 㤤 פο ɸ Ȥ Ƥ ʤ С ϸ ʤ ? Ȥʤ С ͻ ɼԤ ñ ˤ 껦 Ƥ ޤ
I ll come back to the car analogy, but let me focus on the patches idea for now. In their view, the proper way to do stabilisation policy outside a fixed exchange rate regime is, without qualification, to use monetary policy. So the first best policy is to try every monetary means possible, which may in fact turn out to be quite easy if only policymakers adopt the right rule. Fiscal policy is a second best bodge. MM just hates bodgers.
As I explained in this post, the situation is not symmetric. I do not get annoyed aat with MM because I think monetary policy is a bodge. I have spent much time discussing what monetary policy can do at the ZLB, and I have written favourably about nominal GDP targets. But, speaking for just myself, I do get annoyed by at least some advocates of MM.
To understand why I do get annoyed with MM, let me use another car analogy. We are going downhill, and the brakes do not seem to be working properly. I m sitting in the backseat with a representative aat of MM. I suggest to the driver that they should keep trying the brake pedal, but they should aat also put the handbrake on. The person sitting next to me says That is a terrible idea . The brake pedal should work. Maybe try pressing it in a different aat way. But do not put on the handbrake. The smell of burning rubber will be terrible. The brake pedal should work, that is what it is designed for, and to do anything else just lets the car manufacturer off the hook. Have you tried pressing on the accelerator after trying the brake?
OK, that last one is unfair, but you get my point. When you have a macroeconomic disaster, with policymakers who are confused, conflicted and unreliable, you do not obsess over the optimal way of getting out of the disaster. There will be a time and place for that later. Instead you try and convince all the actors involved to do things that will avoid disaster. If both monetary and fiscal policymakers are doing the wrong thing given each other s actions, and your influence on either will be minimal, you encourage both to change their ways.
MM agrees that fiscal stimulus will work unless i